Tag Archives: Netflix

In a twist of the old adage “give them an inch and they’ll take a mile”, just a week after winning a Golden Globe for television series, musical or comedy for their show “Transparent”, web giant Amazon has announced its intentions to enter the movie business by producing theatrical releases. To show just how serious they are about the new venture, the company has hired indie film veteran Ted Hope as Head of Production for Amazon Original Movies.

Amazon already produces television shows for subscribers of its Amazon Prime program. Now in a strategy that mirrors Netflix, its streaming rival, Amazon is aiming to release roughly 12 movies per year in cinemas starting in late 2015. In a window shrinking move, Amazon will premiere each title on Amazon Prime Instant Video (at least in the United States) only four to eight weeks after their theatrical release.

The tight release window may sound like a deal breaker for theatre owners, and probably is for certain exhibitors, but keep in mind the type of films Amazon intends to distribute. “The movies in this program will be ‘indie’ movies,” Amazon Studios Vice President Roy Price told media outlets in an email. “We will be looking for visionary creators who want to make original, unforgettable movies. We expect budgets to be between $5 million and $25 million.”

As Price hinted at in Amazon’s press release announcing the news, independent films have increasingly been experimenting with day-and-date releases in various forms in hopes of augmenting even the most modest of theatrical releases:

“Not only will we bring Prime Instant Video customers exciting, unique, and exclusive films soon after a movie’s theatrical run, but we hope this program will also benefit filmmakers, who too often struggle to mount fresh and daring stories that deserve an audience.”

It doesn’t take an industry expert to read between the lines and understand Price is saying if it wasn’t for Amazon coming along, some of these movies might not even get made, let alone wind up in theatres. If indie films is their goal, then the company has certainly picked the right guy to head up the effort.

Hope is a well-known, highly experienced and savvy producer with deep ties to the independent film world. If his name sounds familiar, it should. He’s produced dozens of well known movies, many of them through Good Machine, which he co-founded and ran with screenwriter and the former head of Focus Features, James Schamus. During his tenure as a producer he’s made multiple films with Edward Burns, Hal Hartley, Todd Solondz and Ang Lee, as well as “21 Grams” with Alejandro González Iñárritu. More recently he spent a year running the San Francisco Film Society and until earlier this month was the head of Fandor, an online subscription streaming service that specializes in indie movies.

As we begin the new year, I strongly believe we are entering a period of great danger and even greater uncertainty. Events are unfolding within and without the movie industry that are extremely threatening to our studio.

This is how Jeffrey Katzenberg began his now infamous 1991 memo which criticized the Walt Disney Studios, of which he was then chairman, and the overall state of the film business at the time. It’s hard to believe those words were written more than 20-years ago since they are so easily applicable to the current motion picture business.

Katzenberg penned his prophetic memo in 1990 during a rainy Christmas vacation in Hawaii. The end-of-year holidays are often a time of increased introspection on a multitude of subjects that range from personal to professional, from political to religious. A few consecutive days with a couple of extra unoccupied hours and and we all turn into armchair Nietsches. Like Katzenberg, I also came to a bit of a realization during our recent holiday season about the industry we all passionately toil away in.

Actually, if recent introspective pieces by Nick Dager at Digital Cinema Report and Luke Edwards at Pocket Lint are any indication, I’m not the only one who spent the holidays ruminating about the present and future of our business. These constructive assessments present qualitative research to diagnose the recent downturn in moviegoing attendance, attributing the cause to a number of factors, including the emergence of subscription streaming media services. To these treatises I would like to add some academic theorems that can be useful in helping us determine where theatrical exhibition falls on the curve of a typical market’s lifecycle as well as models that are useful in forecasting future market conditions.

Collecting Anecdotal Evidence
Because the mathematics and theories underlying diffusion theory can be dry and didactic, translating them to existing or real-world markets can at times seem confusing. Thus, I will attempt an explanation through an anecdote which initially coaxed my mind down the path of such market musings in the first place.

During the holiday break I witnessed innovation diffusion theory in action through the promulgation and/or unfamiliarity of over-the-top streaming services such as Netflix among extended family members and acquaintances. By applying simplified diffusion theories to this qualitative research I was able to discern the current market complexities and the far-reaching consequences motion picture exhibitors and distributors will undoubtedly face due to growing consumer adoption of online video streaming services.

It’s been a week since streaming media giant Netflix announced two big agreements which signal the company is aggressively moving into a space once occupied exclusively by motion picture distributors and exhibitors. One calls for a sequel to the martial arts classic “Crouching Tiger, Hidden Dragon” to be released next August day-and-date on Netflix and in select IMAX theatres. The other sees Netflix enter into a deal with actor Adam Sandler to finance and distribute four feature films.

In their pieces on the announcements journalists used phrases such as “landmark”, “game changer” and “paradigm shift” so often the words lost all meaning. A week later, it turns out the sun still rises in the east and sets in the west, North American movie theatres were just as crowded as ever over the weekend and cinema goers still gobbled up popcorn while watching the latest releases.

This is not to say Netflix’s moves weren’t noteworthy or significant, but rather that the pots of ink (both virtual and otherwise) spilled covering the news were, more often than not, used to write overblown treatises filled with hyperbolic predictions of the industry’s demise crafted primarily to play on the fears of those who depended on it for their livelihoods. Now that everyone’s initial excitement has died down we hope to bring some sanity back into the conversation by examining a few often overlooked concepts.

Crouching Content, Hidden Sequel
Before last week, how many of you actually knew that a sequel was being made to “Crouching Tiger, Hidden Dragon”? After last week’s Netflix news, you can more than triple the number of people who know about the movie, and that’s being extremely conservative. Mainstream media had hitherto paid little notice of the sequel being made to a fourteen-year-old Chinese-language film.

Sure, “Crouching Tiger, Hidden Dragon” was a blockbuster when it was released in 2000; the first foreign language film in the United States to earn more than USD $100 million and for years was the country’s highest grossing foreign language movie of all-time. The movie was also nominated for ten Oscars, the most Academy Award nominations ever received for a foreign language film, a record the film still holds. “Crouching Tiger” went on to win four trophies including Best Foreign Language Film and it served to jump-start the career of director Ang Lee, who was already a well respected helmer.

When it comes to the sequel none of that matters however, in part because so many of the elements which made the original “Crouching Tiger” film a success are missing. Stars Yun-Fat Chow and Ziyi Zhang are missing, leaving Michelle Yeoh as one of the few returning cast members. The screenwriters, including James Schamus, are absent as well. Perhaps most importantly, Ang Lee will not be directing.

Instead, Woo-ping Yuen has been tapped to direct the sequel being penned by John Fusco. Arguably an incredibly influential figure of the Hong Kong action genre, Yuen has only made one film in the past 20 years; “True Legend” in 2010 which cost RMB ¥122.6 million (USD $20 million) to make and only made RMB ¥46.5 million (USD $6.82 million). He has been working predominantly as a fight choreographer for movie such as “Kill Bill: Vol. 2″.

To be sure Yuen may be a fine and capable director, though currently is a bit of an open question due to his limited creative output in recent years. So too then is the quality of “Crouching Tiger, Hidden Dragon: The Green Legend” itself. When Netflix first announced they would finance and open the film it raised speculation that the sequel may not actually be any good. Realizing this, the movie’s distributor, The Weinstein Company, may have been trying to lay off some of their risk on the production, if not entirely recoup their expenditure, by selling Netflix the rights to distribute it.

Brooks Barnes of the New York Times echoed these sentiments as a guest on Showbiz Sandbox this week stating that The Weinstein Company “…got a huge big publicity pop for this sequel and that has to be viewed in that context. Yes it’s sequel to one of the best performing foreign films ever, but if you look closer at that film there are some questions about it…. you just kind of have to wonder what kind of sequel is this? Is this a route that gets them a big headline for something that may ultimately been a direct to home video title all along.”

One single tweet was the final nail in the coffin of the cinema exclusivity window, given added poignancy by being in French; “100 000 locations en une semaine, rien ne sera plus comme avant” (’100,000 viewings in a week, nothing will be as it was’). This was the message from Vincent Maraval, Co-Founder of Wild Bunch, the French production and distribution outfit behind the controversial “Welcome to New York”, which was released on video-on-demand without first screening in French cinemas.

In a country (France) that counts cinema admissions rather than box office takings for a film (something that sets most of Continental Europe apart from Anglo-Saxon markets like the United States and United Kingdom), this tweet added insult to injury for what was truly a milestone for the industry in slaughtering its last sacred cow.

The day-and-date release of films in cinemas and on-line is nothing new, but we have now reached a point where the sacrosanctity of the exclusive theatrical window is well and truly dead for the vast majority of films. The recent Cannes Film Festival and the release of the report “Circulation of European Films in the Digital Era” (funded by the European Parliament and European Commission) has thrown this into sharp focus, yet there are many other factors to consider.

Fighting Day-and-Date for Years

“It’s the biggest threat to the viability of the cinema industry today,” is how John Fithian, president of the National Association of Theatre Owners (NATO), put it in 2006 in response to the day-and-date release of the Steven Soderbergh directed “Bubble”, which was released simultaneously on DVD, pay-per-view and in cinemas. Or rather, in a handful of cinemas. In Landmark Theatres alone, to be precise, the sister company of Magnolia Pictures, which produced and distributed the film, both owned by Mark Cuban.

On “Bubble” and “The Girlfriend Experience”, we really weren’t able to find out if the experiment worked because frankly, we were blackballed by all the chains. We couldn’t get any screens outside of Landmark, even though we offered to cut them in on some of the VOD and video revenue. They just blackballed us. Part of the point of going day-and-date is that somebody who lives in a place where that kind of movie wouldn’t typically open could watch it through VOD because they’ve read about it, because this whole thing of having to sell a movie multiple times is really f–king boring. We never got to find out if that worked or not because what does Landmark have, 75 screens or something? The movie was not allowed to be shown outside that group of theaters so I don’t know how day-and-date works.

Fithian was skilled in rallying his members to boycott the film, even though he knew that releasing a small independent film with no stars on DVD the same day as it plays in a few art-house screens was not the same existential threat as, say, releasing “Oceans 12″ (also directed by Soderbergh) on all platforms on the same day. But what it did represent was the thin end of the wedge, which is why Fithian was willing to risk coming up with a Jack Valenti-VCR-Boston-Strangler-type of quote.

Bubble: “the biggest threat to the viability of the cinema industry today”

The key word in the Fithian quote is ‘today’ and where his greatest success lies was in killing off the discussion and experimentation for another half decade. Fithian is neither a technophobe nor is NATO blind to the direction in which the industry is heading. In response to Soderbergh’s interview, Fithian wrote, “Over the past two years NATO and our members have stated publicly that distributors should sit down privately with their exhibitor partners and their creative partners in dialogue about how the industry moves forward together.” But everything changed in early 2014.

The most serious threat wasn’t “Bubble” in 2006 but the MPAA-FCC exchange in 2009, known by the exhibitor-baiting headline, “MPAA Seeks FCC Okay For Transmission of First Run Movies Directly To Consumers”. While seemingly about day-and-date, we wrote at the time that “the MPAA may simply be hiding behind the concept of protecting content during shortened release windows as camouflage for their true motive; securing high definition digital content as it is distributed into the electronic ether of the home by controlling which devices can playback and display the content.”

For the first time ever, Internet platforms have overtaken DVDs for distributing the largest number of “awards screeners” to industry professionals voting for year-end accolades. This post gives a breakdown analysis of the various streaming and download formats, with iTunes and Vimeo battling for the top position while fending off smaller rivals.

With the movie awards season upon us, Hollywood studios and independent distributors are fighting to get their films seen by the voting members of AMPAS (the Oscars), BAFTA, HFPA (Golden Globes) and the various film professional guilds (DGA, WGA, SAG, et al). Though studios prefer voting members to see their films in cinemas, the reality is that many will have to watch them at home on so-called “screeners”, particularly given the glut of prestigious films released towards the end of the year. Traditionally this has meant sending out VHS tapes (in the 90s) and ultimately DVDs, which tend to have embedded watermarks that are either visible (‘This DVD screener is the property of Studio X and not to be re-distributed’) or invisible (identifying the voting member it was sent to via a unique code).

The cost of sending out thousands of DVDs to the various voting members can be enormous, even for big distributors, particularly if they are individually watermarked. For films released earlier in the year commercial DVDs are often used, but recent releases like “The Wolf of Wall Street” or “The Hobbit: The Desolation of Smaug” need to be individually watermarked so they can be traced back to whom it was sent, in case this version is ripped and uploaded to the Internet, as has occurred in the past. Various attempts at new technology has been tried, such as Dolby’s encrypted DVD Cinea format, which involved sending a modified DVD player to each voting member of BAFTA and AMPAS. While working technically, it proved too cumbersome for voters who were often away from home over the holiday and couldn’t watch the encrypted DVDs on regular DVD players while traveling. Some studios have also begun sending Blu-Ray discs, with Warner Bros. first and Universal Pictures following last year.

This year Internet distribution has emerged as the cost-effective method preferred by smaller distributors, with many turning to streaming or downloading as the best way to catch the eye of voting members, at least in this case those of BAFTA, the British Academy of Film and Television Arts.

History may remember this past summer’s blockbuster season more as the one when studios successfully shortened the theatrical window by three weeks, rather than as the one in which numerous $200 million tentpole films failed at the box office. Sure, the latter seems to be getting all the press right now, but it’s the former that may prove to have a longer term impact on the industry.

Back in June, Sony and Disney made headlines by announcing they would experiment with streaming movies online while the films were still playing in theatres. Movies like “Django Unchained,” “Wreck-It Ralph” and “Brave” were all available for streaming before their theatrical runs were over. In case you’re wondering why you never saw them on Netflix or your local video-on-demand service, the pilot program took place in South Korea to test market feasibility and adoption. South Korea was a perfect target destination for such a pilot; not only is it the eighth largest film market in the world, it is also the currently the home of the fastest overall Internet connectivity on the planet. Make no mistake, if the trial proves a success, we will see theatrical releases streamed into the home in Europe and the United States.

Amazon, iTunes & DVDs

Much in the way television production companies have turned from traditional cable networks to services such as Netflix with shows like “House of Cards” and “Orange is the New Black”, movie studios have found a way to circumvent the DVD/Blu-Ray distribution chain (and its accompanying restrictions) by releasing films on iTunes and other VOD outlets before physical copies ever hits retail stores.

MacRumors reported in August that Paramount Picture’ “Star Trek Into Darkness” got an early release on iTunes and Amazon weeks before DVD or Blu-Ray. Movie fanatics with beefier ISP connections from providers like HughesNet and Verizon have bandwidth fast enough to watch Blu-Ray quality streams at the click of a button; no buffering required. “Star Trek Into Darkness” is one of the bigger titles to get an early online release and given how successful it’s been, will hardly be the last.

Over a year after MoviePass failed to launch its all-you-can-view subscription movie service, the company is back with a retooled offering that has a much better shot at surviving the inevitable pushback by cinema chains and studios.

You might recall last June MoviePass announced a private beta with 21 theatres in San Francisco that would allow subscribers paying USD $50 per month to watch an unlimited number of films in cinemas. In effect, the idea was to bring the Netflix business model to movie theatres. The companies plans were shelved however when theatre chains such as AMC and Landmark said they had no intention of working with MoviePass.

By July 2011 MoviePass had teamed up with Hollywood Movie Money to offer its members a similar service, provided they dealt with the inconvenience of printing vouchers at home which could then be redeemed at cinemas. Theatres would in turn be paid for each ticket, in-full, with MoviePass swallowing any price difference. At best, this was a cumbersome process which did not seam ideal for wide adoption.

MoviePass has since parted ways with Hollywood Movie Money, dumped its voucher scheme and earlier this week made public its latest unlimited viewing subscription model. This time, MoviePass may have come up with a system that cinema owners and studios won’t balk at and its customers will find more attractive.

Now, members pay between USD $19.99 and USD $34.99 per month and can watch up to one movie in theatres per day. The subscription price is determined on where a member lives. MoviePass has created three zones; those living in areas where ticket prices average less than USD $10 will pay USD $19.99 per month, whereas in high density markets such as New York or Los Angeles, where ticket prices average USD $14, members will pay at the USD $34.99 level.

Rather than having to print out a voucher beforehand, subscribers can use an iPhone app to log into any theatre throughout the United States, select a movie and showtime and then use a special MoviePass debit card to pay for a ticket. The process has two main caveats in that subscribers must be within 100 yards of the theatre when logging in (which activates the debit card) and the theatre must accept credit cards. Cinemas will get paid the going rate for

The new MoviePass service does come with a few restrictions. For instance, 3D and Imax films are not included as part of the monthly plan. As well, one can’t just subscribe to peak moviegoing months such as summer or the year-end holiday season.